The private car market faces one of its greatest challenges when the EU gender directive comes into force on 21 December 2012, both in terms of underwriting risks and marketing products to a unisex audience.
Premiums will rise for many female drivers while male drivers will see their premiums drop. Providers who have a large female book of business will need to address the risks involved in retaining this business as well as providing cover for the riskier male driver.
According to independent financial research company Defaqto, product differentiation in cover, marketing and sales processes will therefore be essential for motor providers in 2012.
Defaqto's latest Review of the motor insurance market, published today:
-Looks at the size and distribution of the private car comprehensive market by provider, product and underwriter
-Reviews key trends in policy fees, product cover, excesses and accident management services which can help providers identify potential areas of differentiation
-Assesses some of the key impacts of the gender directive and how providers are changing their focus towards behavioural underwriting
Mike Powell, Defaqto's Insight Analyst for General Insurance, said:
"The market faces one of its biggest challenges when the gender directive comes into force at the end of this year, both in terms of the underwriting and pricing of risks and how it markets products to its target audience.
"The introduction of the gender directive will create a level playing field. Although premium will still be one of the main purchasing decisions, this is a clear opportunity for the market to move consumer focus away from price and onto the quality of the actual product they are purchasing - and to differentiate their products in a crowded marketplace."
Providers can download the report at: www.defaqto.com/provider/publications.
Being successful is all about ensuring products take a distinct place in the market, and having access to comprehensive market and competitor intelligence is critical to achieving this. Defaqto Matrix is a web-based product research application that provides firms with independent, whole of market data on the motor insurance sector. Defaqto Matrix helps providers:
-Identify where their products sit in relation to competitors
-What features their products need to have in order to stand out
-How to position them for maximum impact
Firms can access further information at: www.defaqto.com/provider/matrix.
In addition, Defaqto Star Ratings give each comprehensive motor insurance policy on the market a rating from 1 to 5 depending on how comprehensive they are. Star Ratings are an independent verification of the quality of a provider's product which reinforces the position and strengthens the profile of the product. Star Ratings also help providers differentiate and promote their products on the features they offer rather than price alone. Firms can access Star Ratings for comprehensive motor insurance at: www.defaqto.com/star-ratings/motor-insurance.
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